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Chainlink Labs’ Johann Eid Explains How Chainlink Data Streams Will Expand DeFi’s Landscape

SmartCon 2023 featured more than 100 blockchain experts and financial industry leaders including founders of influential protocols in the Chainlink ecosystem. To get a closer look at the future of web3, Nasdaq TradeTalks host Jill Malandrino filmed a two-day interview lineup with speakers at this year’s event in Barcelona, Spain. 

Chainlink Labs Chief Business Officer Johann Eid, who delivered a powerful SmartCon keynote outlining the path toward a tokenized world through Chainlink’s web3 infrastructure, sat down with Malandrino to explain how Chainlink Data Streams brings DeFi to parity with centralized finance (CeFi), particularly with respect to derivatives.

Data Streams is a pull-based oracle solution through which high-frequency market data is continuously made available offchain and pulled onchain as needed by users’ transactions. This allows dApps to consume data more cost-effectively and at lower latencies while reducing the risk of frontrunning and MEV by keeping price data private until transactions are settled.

“We needed a new system to ensure DeFi can do more,” Eid said of Chainlink Labs’ decision to develop a pull-based oracle. “With the push system we had, data had some latency. With Data Streams, we reduce latency to mere milliseconds.”

He explained how Data Streams can be combined with automated execution through Chainlink Automation to unlock ultra-fast user-friendly DeFi derivative products and enable highly performant decentralized exchanges that rival the trading experience of centralized exchanges.

“With a lot of the derivative exchanges right now, the volume happens on CeFi systems, systems which are centralized by nature and that can be cheated,” he said. “We want people to be using verifiable decentralized systems and, through Data Streams, you can now have DeFi be extremely performant.”

Eid views Data Streams as a groundbreaking innovation because it solves DeFi’s technical limitations.

“All the stuff that you can do in CeFi today, you can now do in DeFi, basically,” he explained.

“Derivative exchanges, options, prediction markets, and very, very low latency use cases with very high velocity are now enabled through Chainlink Data Streams. DeFi can now compete with CeFi in terms of performance.”

GMX, the largest decentralized perpetual exchange by Total Value Locked (TVL) on Arbitrum and Avalanche, has already announced its integration of Chainlink Data Streams to power GMX V2.

“We basically built our solution with them, with their feedback, so now this project is live using Chainlink Data Streams and we’re talking to many more projects to integrate streams very soon,” Eid said.

Watch Jill Malandrino’s full interview with Johann Eid.

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